This proposal is the second revision of grant 1 K23 DK 064649-01. The reviewers' comments have been carefully reviewed and incorporated into this revision. Given the anticipated sharp increases in type 2 diabetic nephropathy in the US, and the resulting rise in end stage renal disease, diabetic nephropathy represents an urgent area of interest, as acknowledged in the Healthy People 2000 report. During the proposed grant period, Dr. Ruth C. Campbell will work to become an independent investigator in the field of progression of chronic kidney disease with an emphasis on diabetic nephropathy. She will accomplish these goals under the combined guidance of her mentors, Drs. Stephen Rostand and Paul Sanders. She will complete a Master's Degree of Science Public Health in Clinical Studies, a post doctoral program aimed to assist clinicians gain skills in epidemiology, statistics and public health issues. This will give her the necessary skills in clinical study design and statistical analysis needed to become an independent investigator. She will also complete the project "Effect of pioglitazone on proteinuria in type 2 diabetes." Pioglitazone is a member of the insulin sensitizing thiazolidinedione (TZD) class and has been approved for the treatment of type 2 diabetes. TZD agents affect the PPAR-gamma receptor and have other effects besides increasing insulin sensitivity. PPAR-gamma receptors have been found in the kidney and smooth muscle cells, suggesting other areas of possible activity. They have been found to lower blood pressure in animals and humans, and to reduce proteinuria in some animal models of both diabetic and non-diabetic nephropathy. They have also been shown to reduce TGF-beta levels in animal models of renal insufficiency. TZD compounds were found to reduce microalbuminuria in a small study of type 2 diabetic patients. It is unknown if they would have a similar effect in overt diabetic nephropathy. The proposed study would be an open-label, randomized, parallel arm trial comparing the effect of 24 weeks of pioglitazone therapy vs. non-TZD based diabetic therapy on 24-hour protein excretion in type 2 diabetic nephropathy in patients with persistent proteinuria despite treatment with an angiotensin 2-receptor antagonist. Secondary endpoints will be the effect of pioglitazone on urinary TGF-beta levels, urinary podocyte number, blood pressure, insulin resistance, glycemic control and renal hemodynamics